Six States Construction Co. began work on a new bridge over the Illinois River on January 1, 2014. The project is to be completed by December 31, 2016, for a fixed price of $500 million. In order to ensure that the project has enough funds for completion, the accountants have front-loaded the profits into the first year. The following is a year-by-year recap of construction costs incurred and the estimated costs to complete the project as of the end of each year. Progress billings and cash collections are also indicated.

______________________________2014                    2015                         2016_____

Actual costs incurred                     

during the year                                 $135,000,000            $225,000,000            $ 45,000,000

Actual costs incurred                                      

in prior years                                                     -0-               135,000,000             360,000,000

Cumulative actual costs

incurred to date                                $135,000,000            $360,000,000            $405,000,000

Estimated costs to complete

at the end of the year                      315,000,000            40,000,000                            -0-

Total costs (act. + est)                      $450,000,000            $400,000,000            $405,000,000

Billings made during the year       $200,000,000            $200,000,000            $100,000,000

Cash collections

during the year                                 $175,000,000            $200,000,000            $125,000,000

Determine the amount of gross profit or loss to be recognized in each of the three years applying both the percentage-of-completion and completed contract methods.

                                                            Percentage of Completion Method____________

                                                            2012                           2013                           2014  

Contract price                      

Less: total cost                     

Total estimated gross

profit to date                         

Multiplied by %

of completion                                       

Gross profit

recognized to date              

Less: gross profit

Recognized in

prior years                            

Gross profit

(loss) recognized                

currently                               

Estimates of percentage of completion:

                        2012                                       2013                           2014

           

Completed Contract method:

Gross profit recognized:

                        2012                           2013                           2014